Forecast: $25bn upsurge in advertising spend

September 21, 2015

Updated forecasts for worldwide advertising expenditure in 2015 and 2016 from global media network Carat indicate continued optimism through positive global and regional outlook and solid growth in Digital and Mobile. Based on data received from 59 markets across the Americas, Asia Pacific and EMEA, Carat’s latest global advertising expenditure forecasts that global advertising spend will grow by +4.0 per cent in 2015 to $529 billion, a slight decline from the +4.6 per cent predicted in March 2015, and 2016 is predicted to grow by +4.7 per cent, accounting for an additional US$25 billion in spend.

Fuelled by the rise of Mobile and Online Video spending trends, Carat’s latest forecasts reconfirm the continued solid growth for Digital media, evident through the upsurge in the predicted share of advertising spend in 2015 of 24.3 per cent and 26.5 per cent in 2016. For 10 of the markets analysed, including the UK, Ireland, Canada and Australia, Digital is now the principle media used based on spend, with the US market predicted to join this list in 2018 when digital advertising spend is forecast to overtake TV advertising by more than $4 billion.

From a regional perspective, Carat confirms on-going positive momentum in 2015 for most regions although volatility occurs in some individual markets, with Western Europe at +2.6 per cent, +4.2 per cent in North America, +4.1 per cent in Asia Pacific and +12.7 per cent in Latin America. Western Europe’s continued positive growth is driven by solid 2015 figures in the UK and Spain of +6.4 per cent and +6.9 per cent respectively, strong enough to withstand the political turmoil in Greece and its revised advertising growth this year of -12 per cent, significantly down from the +8 per cent predicted in March 2015. Despite a slight decline in growth forecasts due to China’s economic downturn, Asia Pacific remains strong in 2015 with an above global spend rate of +4.1 per cent, driven by high-performing India at 11 per cent and growing Australia at 2.4 per cent. Carat’s data also reports an encouraging outlook for 2016, with all regions predicted to increase year-on-year spend next year and Central & Eastern Europe to return to positive growth.

By media, Digital continues to be the only channel warranting double digital growth, predicted at +15.7 per cent in 2015 and +14.3 per cent in 2016. This is driven by the high demand for Mobile and Online Video advertising especially across social media, with 51.2 per cent and 22 per cent year-on-year growth expected this year. Programmatic buying is also experiencing rapid growth at a rate of +20 per cent each year. TV remains resilient with a steady 42.0 per cent market share in 2015 and is predicted to grow by more than +3 per cent in 2016, as the upcoming Olympic Games and US elections are expected to drive considerable viewership. Despite the ongoing decline in Print spend, Carat’s forecasts confirm year-on-year growth for all other media with updated predictions for 2015 highlighting year-on-year growth in Cinema at +4.7 per cent, Radio at +1.3 per cent and Outdoor at +3.4 per cent, with the latter two slightly revised down from March 2015 figures.

According to Jerry Buhlmann, CEO of Dentsu Aegis Network, Carat’s latest advertising spend forecast shows optimism balanced with realism during a year of increased volatility in major markets such as Russia and China. “Noticeably, the landscape is becoming increasingly complex as previously grouped markets, such as the BRIC economies, are now operating differently and economic situations can quickly change markets at pace. Our teams are well positioned to navigate our clients through this multifaceted marketplace and successfully assimilate new market opportunities at speed.”

“Digital media continues to achieve outstanding growth as the effectiveness of this medium and results achieved, especially with millennials, warrants the upsurge in spend levels. As Digital rapidly evolves into a more established asset and Programmatic and Search bring stronger performance and efficiency, we continue to add value to our clients by delivering innovative solutions that are different and better.”